HMRC warns thousands are ‘missing out’ on £500 in free state support – check now

Martin Lewis reminds parents to confirm tax-free childcare

When you subscribe we will use the information you provide to send you these newsletters.Sometimes they’ll include recommendations for other related newsletters or services we offer.Our Privacy Notice explains more about how we use your data, and your rights.You can unsubscribe at any time.

HMRC has warned that thousands of families across the UK are “missing out” on the chance to save money on childcare. The Government can award people with tax-free childcare accounts to pay for childcare costs, with the state topping up the money saved into this account with up to £500 every three months.

HMRC detailed on March 16: “[Families who are missing out] could join almost 248,000 families across the UK who saved money using Tax-Free Childcare in December 2020, an increase of almost 43,000 families from December 2019, and received a share of more than £25million in government top-up payments.”

Tax-free childcare allows parents or carers who have children aged up to 11 (or up to 17 if they’re disabled) to pay their childcare provider through the scheme.

Should this be done, families will receive a 20 percent Government top-up on any money deposited.

In monetary terms, for every £8 deposited (per child), parents will receive a £2 top up to the value of £500 every three months.

This increases to £1,000 for parents of disabled children.

Over the course of a year, this would equate to either £2,000 or £4,000.

The top-up will be paid directly into the child’s account and will be ready to use “almost instantly”.

HMRC noted that as children across the UK return to school, families should be aware they could use this money to pay for costs such as childminder fees, after school clubs or sports activities.

Martin Lewis issues ‘reminder’ on tax-free childcare support [EXPERT]
State pension: Women advised to claim child benefit to avoid NI issues [INSIGHT]
Child benefit: Basic rate taxpayers to be hit by high income charge

Myrtle Lloyd, HMRC’s Director General for Customer Services, commented on this: “As children return to their schools, after-school clubs and nurseries, help is available towards the cost of childcare.

“Families using Tax-Free Childcare to pay their childcare provider are already benefiting from the 20 percent government top-up on deposits, and you could too.

“To find out more search ‘tax-free childcare’ on GOV.UK.”

Eligibility for this scheme usually depends on:

  • If a claimant is working
  • Their income (and their partner’s income, if they have one)
  • Their child’s age and circumstances
  • Their immigration status

Claimants will usually get tax-free childcare if they’re in work, on sick or annual leave, or shared parental, maternity, paternity or adoption leave.

Additionally, people may still be eligible for the support if they’re temporarily working less due to coronavirus and/or receiving support from the furlough scheme or SEISS.

Applicants will also be expected to earn a certain amount over the coming three months, with this being at least the national minimum wage or living age for 16 hours a week on average.

For example, over three months claimants must be expected to earn at least £1,813.76, the national living wage for people over 25.

To apply for the tax-free childcare account claimants will need to head to the Government’s website.

When applying, claimants will need to have certain details ready, such as their National Insurance Number and/or Unique Taxpayer Reference if they’re self-employed.

The Government notes the application process should take no more than 20 minutes to complete.

It should be noted it’s not possible to get tax-free childcare at the same time as claiming working tax credit, child tax credit, Universal Credit or childcare vouchers.

Source: Read Full Article